The fall of 2017 rolled in with the World Bank’s Ease of Doing Business Rankings Report, according to which India leapfrogged 30 ranks from the previous year to be placed at 100 among the 190 countries. But, behold, the journey had just begun; for much to the joy of the Indian government, businesses especially the start ups in the travel and tourism industry and other stakeholders, the 2019 report, launched just a day back revealed to us much bigger and better surprises! Astounding thewhole global economy once again, India this year has rocketed from 100th rank to the 77th rank in the EODB index. Not only this, improving it’s ranking in six out of ten parameters, India has also been tagged as one of the top ten biggest reformers in the world. What adds to the pride even more is that India now is the top ranker in the South Asian countries and third in the BRICS nations.
This commendable feat has been a result of multiple interventions and policy changes initiated by the government in the past, which has been unanimously applauded by business and industry leaders alike. As Modi ji has put it, ‘We are unwavering in our commitment towards economic reforms, which will ensure an environment that fosters industry, investment and opportunities.’ Surely, for the Travel industry particularly, the prospects couldn’t have been better in the country. And so, let’s take a closer look at how India achieved the herculean jump of 53 positions in just two years.
WHAT EXACTLY EASE OF BUSINESS MEANS ?
EODB is an index published by the World Bank. It is an aggregate figure that includes different parameters which define the ease of doing business in a country. For each of the indicators that form a part of the statistic ‘Ease of doing business,’ a distance to frontier score is computed and all the scores are aggregated. The aggregated score becomes the index. The distance to frontier score benchmarks economies with respect to the best practices, showing the absolute distance to the best performance on each Doing Business indicator. In India, the survey is taken up in two cities- Mumbai and Delhi. The report of 2019 indicates that India’s DTF score improved from 60.76 to 67.23 this year.
WHAT ARE EODB PARAMETERS ?
The rankings are calculated based on the ten parameters and their sub parameters as listed below:
- Starting a business
- Dealing with construction permits
- Getting electricity
- Registering property
- Getting credit
- Protecting minority investors
- Paying taxes
- Trading across borders
- Enforcing contracts
- Resolving insolvency
HOW HAS INDIA FARED ON EODB RANKINGS ?
The 2019 Doing Business Report identifies India, having rank 77, as one of the top ten performers for this year owing to the immense improvements that have taken place in the country over the past one year. With its foray into the Top 77 for the first time, India is now topping the list in the South Asian region. Of the 10 parameters that constitute the index, India improved in six this year and implemented reforms in eight which has been further elaborated in the next section.
WHAT STEPS DID INDIA TAKE TO IMPROVE IT’S RANKING?
Besides the implementation of the Goods and Services Tax and the Insolvency and Bankruptcy Code and setting up of commercial courts, here are some of the major reforms undertaken by the government that enabled India to break into the top 100 countries for the first time last year and skyrocket even further this year to the top 77.1. The government announced investor-centric hub-and-spoke based online single window model for providing clearances and filing compliances.
Especially for start ups coming up in such large numbers in the booming travel industry the benefits of this reform are surely manifold.
- It launched another online portal ShramSuvidha for firms to file a common return on its portal to comply with as many as eight labour laws at one go.
- It targeted to reduce the number of days required to set up a business in India to four which surely is a major boost for the start up industry. Yet another joy for the start up industry that India has jumped from the 156th to the 137th rank in the indicator ‘Starting a business’.
- It has also done away with the requirement of the affidavit from the applicants of the defence industry.
- The insurance reform bill has been passed in Parliament which allows more Foreign Direct Investment in the sector further accelerating the growth and expansion for more and more businesses.
- It allowed 39 exemptions for private companies licensed to set up businesses under international financial services centres (IFSC) such as allowing them to make investments through more than two investment companies, and waived transaction taxes and stamp duty for IFSCs.
- The government also set up the National Investment and Infrastructure Fund (NIIF) with the aim to attract investments from both domestic and international sources for infrastructure development in commercially viable projects inviting entrepreneurs to come and try their mettle in the field.
- In a bid to reduce red-tapism, the government abolished the Foreign Investment Promotion Board (FIPB).
- The time taken by businesses to get new electricity connection has reduced from 105 days to mere 55 days, yet another arena in which the offices of travel agencies and other businesses used to grapple with the complex procedures and delays for a long time. Definitely now with the government coming up with more and more such radical measures the growth of the start ups in the travel industry in India will surely be a skyrocketing one.
- Introducing deemed approvals and reducing the cost of obtaining all construction and business permits also has enabled India to jump from 181 to 52 in just a matter of twelve months, and improvement of 129 ranks!
THE ROAD AHEAD
India’s ranking in the ease of doing business is crucial for the Narendra Modi government as the Prime Minister had been pitching the country as an ideal place for businesses with initiatives like ‘Make in India” and “minimum government, maximum governance”. Especially for the booming start up industry the opportunity couldn’t have been better with the entire process getting smoother, simplerand better with each passing day. In a nutshell, with the wheels of progress set in full motion, it won’t be wrong to say that Modi’s dream of seeing India in the top 50 countries by 2019 isn’t too far from us now and the sprouting travel industry also won’t be distant from topping the charts of the most preferred sector for start ups.